The General Ledger - Account Posting and Journal Entry Examples

INTRODUCING THE LEDGER CONCEPT: As you just saw, the general journal is, in essence, a notebook that contains page after page of detailed accounting transactions. In contrast, the general ledger is, in essence, another notebook that contains a page for each and every account in use by a company. The ledger account for America would include the Cash page as illustrated below.

America's transactions utilized all of the following accounts:

Cash

Accounts Receivable

Land

Accounts Payable

Notes Payable

Capital Stock

Service Revenue

Advertising Expense

Utilities Expense

Therefore, America Corporation's general ledger will include a separate page for each of these nine accounts.

POSTING: Before diving into the details of each account, let's consider what we are about to do. We are going to determine the balance of each specific account by posting. To do this, we will copy ("post") the entries listed in the journal into their respective ledger accounts. In other words, the debits and credits in the journal will be accumulated ("transferred"/"sorted") into the appropriate debit and credit columns of each ledger page. Here is an illustration of posting to the Cash account. A similar process would occur for each of the other accounts:

General Ledger

Below are all of the ledger pages for America that would result after posting all of the journal entries:

TO REVIEW: Thus far you should have grasped the following accounting "steps":

          - Step 1: Each transaction is analyzed to determine the accounts involved.
          - Step 2: A journal entry is entered into the general journal for each transaction.
          - Step 3: Periodically, the journal entries are posted to the appropriate general ledger pages.

THE COSTS	THE GENERAL LEDGER

*LINKS* Financial Information Accounting Systems Introduction to Cost Accounting Cost definition Use of Costs Classification of Costs Inventory Valuation Costs Behavior Cost Accounting Systems Standard Costs and Variances Cost-Volume-Profit Analysis Break-Even Point Target Profit Budgeting Master Budget Activity Based Costing (ABC) Transfer Prices Accounting Profession & Ethics Accounting Equation Financial Statements Financial Statement Reporting Accounts, Debits & Credits The Journal The General Ledger The Trial Balance "T" Accounts Income Measurement Home Bibliography Contact *Interesting Articles* The Art of Negotiation	INTRODUCING THE LEDGER CONCEPT: As you just saw, the general journal is, in essence, a notebook that contains page after page of detailed accounting transactions. In contrast, the general ledger is, in essence, another notebook that contains a page for each and every account in use by a company. The ledger account for America would include the Cash page as illustrated below. America's transactions utilized all of the following accounts: Cash Accounts Receivable Land Accounts Payable Notes Payable Capital Stock Service Revenue Advertising Expense Utilities Expense Therefore, America Corporation's general ledger will include a separate page for each of these nine accounts. POSTING: Before diving into the details of each account, let's consider what we are about to do. We are going to determine the balance of each specific account by posting. To do this, we will copy ("post") the entries listed in the journal into their respective ledger accounts. In other words, the debits and credits in the journal will be accumulated ("transferred"/"sorted") into the appropriate debit and credit columns of each ledger page. Here is an illustration of posting to the Cash account. A similar process would occur for each of the other accounts: Below are all of the ledger pages for America that would result after posting all of the journal entries: TO REVIEW: Thus far you should have grasped the following accounting "steps": - Step 1: Each transaction is analyzed to determine the accounts involved. - Step 2: A journal entry is entered into the general journal for each transaction. - Step 3: Periodically, the journal entries are posted to the appropriate general ledger pages.